1. Assuming you are part of the Board of Directors in a profitable stock corporation and you have a friend who is interested to subscribe to some shares in your corporation and had asked for your assistance to process the subscription. You know that you friend is currently experiencing some financial difficulties and that your friend’s subscription would not be fully paid for.

a. Would you assist your friend in processing his/her subscription? Why or why not?

b. Would you disclose this information to your board members and institute some action/s to prevent your friend and similar possible defaulting subscriber from subscribing to your company’s shares? Explain.

2. Assume instead that your company needs more capital to continue operations, would your answer in #1a and #1b change? Why or why not?